How Profit Sharing Transformed My Team and Doubled Profits with Robert Gallaher
In this episode of World’s Greatest Boss, I sit down with Robert Gallaher—entrepreneur, CEO, and author of Profit Sharing: The Power of Shared Success—to dive deep into how profit sharing can revolutionize your company’s culture, profits, and employee engagement.
Robert shares the journey of how he went from an overworked business owner to building a thriving company culture powered by profit sharing. We discuss what worked, what didn’t, and the lessons he learned along the way—from setting the right expectations to making profit sharing part of everyday conversations. If you’re a business owner looking to improve retention, accountability, and profits, this is a must-listen
What you’ll hear in this episode:
[2:00] Why Robert started profit sharing—and how it saved his business and marriage
[4:00] Common mistakes business owners make before implementing profit sharing
[6:30] How not to roll out a profit sharing plan (and lessons learned from his first attempt)
[8:30] Why talking about profit sharing constantly is critical—and how Robert makes it part of daily conversations
[11:00] Real-life examples of how profit sharing drives employees to think like owners
[12:30] How transparent you need to be with financials (and who should see what)
[14:00] Adapting profit sharing for different types of businesses (seasonal, service, etc.)
[16:00] Why Robert tests new profit sharing ideas in one company before rolling out
[18:00] Who should be included in profit sharing (and why not everyone may be ready)
[19:00] How much to pay: flat vs. percentage-based profit sharing and why $1,000/month is the starting point
[22:00] Balancing competitive pay, benefits, and profit sharing—why it’s an “and,” not an “or”
[24:00] How long it takes to see results (hint: this isn’t a quick fix)
[26:00] Real profit sharing numbers: how much Robert pays out and how much more he makes because of it
[27:00] Where to learn more and get Robert’s book and upcoming course
Resources & Links:
Book: Profit Sharing: The Power of Shared Success — Buy on Amazon
Connect with Robert on Facebook: @1robertgallaher1 | Profile
Coming Soon: ProfitX course launching July — stay tuned for details!
READ IT INSTEAD:
How to Implement Profit Sharing in Your Small Business (And Why It Might Be the Key to Growing Your Team and Profits)
If you’re a small business owner, you’ve probably said (or at least thought), “I just wish my employees would care about this business as much as I do.”
You started your company to create freedom — freedom from a boss, freedom to make your own choices, and maybe even the freedom to step away from the daily grind at some point. But as your team grows, you might find yourself stuck in the weeds, still making every decision, solving every problem, and wondering why your employees don’t take more ownership.
The truth is, most employees don’t think like owners—because they aren’t treated like owners. And if they don’t have a real stake in the outcome, it’s hard to blame them.
That’s why profit sharing can be a game-changer for small businesses. When done right, profit sharing aligns your team’s goals with yours — so everyone is working toward growing profits, taking care of customers, and making smart decisions that drive the business forward.
In this post, we’ll walk through how to set up a profit sharing plan for your business, common mistakes to avoid, and why this could be the system that finally helps you build a team that acts like owners—so you can step back and enjoy the freedom you set out to create.
What Is Profit Sharing and Why Should Small Businesses Care?
Profit sharing is a way to share a portion of your company’s profits with your employees, usually as a monthly or quarterly bonus based on company performance.
Unlike traditional bonuses, which can feel random or disconnected from daily work, profit sharing is tied directly to the success of the business—so when the company wins, your employees win too.
For small business owners, profit sharing can:
Motivate employees to act like owners, focusing on profit-driving activities.
Improve retention by giving employees a reason to stick around and care.
Help attract top talent who want more than just a paycheck.
Free you from micromanaging, because your team understands how their decisions impact the bottom line.
As Robert Gallaher, author of Profit Sharing: The Power of Shared Success, explains, profit sharing transformed his companies and allowed him to stop working 80-hour weeks and actually enjoy life outside the business.
7 Questions to Ask Before You Implement Profit Sharing
Before jumping into a profit sharing plan, ask yourself these important questions:
What is my goal? Are you trying to improve retention, boost profits, or get employees to care more? Knowing your “why” will shape your plan.
Who should participate? Start with decision-makers—your managers and leaders who directly impact profit.
How much should I share? The amount has to be substantial enough to matter (we’ll cover this below).
How often should I pay? Monthly profit sharing is more effective than quarterly because people live month to month.
How transparent am I willing to be? You’ll need to share some financial information, at least with leaders.
What behaviors do I want to encourage? Tie profit sharing to specific actions, like cost-saving or upselling.
How will I communicate and reinforce this? You’ll need to talk about profit sharing regularly, not just once a year.
Step-by-Step Guide to Setting Up a Profit Sharing Plan
Define Your Business Goals: Decide what you want to incentivize—higher profits, lower costs, improved productivity? Profit sharing should directly connect to these goals.
Pick the Right Participants: Start with decision-makers—employees who directly influence profitability. You can always expand later.
Decide How Much to Share: Start with a flat amount, like $1,000/month for each leader, to make it simple and impactful. Over time, you can move to a percentage-based plan tied to net profit. Tip from Rob: If the amount isn’t enough to move their financial needle (like paying rent or groceries), it won’t motivate them.
Pay Monthly, Not Quarterly: Employees think in monthly terms—rent, groceries, bills. A monthly payout keeps profit sharing top of mind and connects daily decisions to real money.
Set Clear Rules to Protect the Business: Make sure you’re not over-sharing and hurting the company’s health. Start small and test new ideas in one business unit before rolling out company-wide.
Communicate and Reinforce It Constantly: Talk about profit sharing in:Staff meetings,One-on-ones, and job reviews. Tie it to real examples—“This job came in under budget, and that means more profit sharing for all of us.” Rob’s Rule: You have to say it 21 times before people really hear it.
Measure, Review, and Adjust: Review profits, payouts, and employee feedback. Tweak the system as needed—just make sure you communicate any changes clearly.
Common Mistakes to Avoid with Profit Sharing
Rolling it out to everyone right away—Start with leaders first.
Paying quarterly—People don’t think quarterly. Monthly keeps them engaged.
Making payouts too small—If $1,000/month is what moves the needle, start there.
Not being transparent enough—Leaders need to see at least a portion of the financials.
Not connecting behavior to outcomes—Tie profit sharing to specific actions that drive profit.
Ignoring financial education—Teach team members how to manage the ups and downs (especially in seasonal businesses).
Failing to communicate—If you don’t talk about it regularly, it will fade into the background.
What Profit Sharing Can Do for Your Business
When done right, profit sharing:
Boosts employee retention and engagement.
Makes hiring easier. People want to work where they can grow and share in success.
Aligns your team’s daily decisions with the company’s goals.
Frees you up to lead and grow, rather than micromanage.
Where to Learn More
Want to dig deeper into how to implement profit sharing in your business?
🎙️ Listen to the full podcast episode for step-by-step advice and real-life stories: [Podcast Link]
📖 Grab Robert Gallaher’s book, Profit Sharing: The Power of Shared Success, on Amazon.
📱 Connect with Rob on Facebook: @1robertgallaher1